PJ 2022 ER: Certain pup joints
Statement of Reasons—expiry review determination

Additional product information

[19] Pup joints are tubular steel products that fall within the larger product category of oil country tubular goods (OCTG). Pup joints, along with other OCTG products such as casing, tubing and drill pipe, are used in the process of drilling for oil and natural gas and in bringing the oil and gas to the surface.

[20] Pup joints, which are in essence short pieces of casing or tubing, are used for the purpose of adjusting the length of a string of casing or tubing in a well to its exact requirements. They may also be used to adjust the depth of down hole tools, particularly where exact depth readings in a well are required for any given purpose, such as setting valves, packers, nipples or circulating sleeves. Lastly, pup joints are used with down hole pumps. The number and lengths of pup joints needed will vary from well to well, depending on the equipment needed and the performance requirements established by the engineers.

[21] Pup joints are supplied to meet American Petroleum Institute (API) specification 5CT^{Footnote 7} or equivalent standards. Although these goods may be produced in either a welded or seamless form, seamless pup joints are the product of choice in the industry. Pup joint manufacturers offer the product in lengths anywhere from 2 feet to 20 feet but pup joints are typically manufactured and sold in standard lengths of 2, 3, 4, 6, 8, 10 and 12 feet.

[22] Only tubing pup joints are subject goods; casing pup joints were excluded from the CITT’s finding and are specifically referred to in the product definition as being excluded.

[23] It should be noted that perforated pup joints are subject goods. These are pup joints with rows of holes or slots drilled longitudinally along the tube. Although the input tubing begins as an API 5CT product, once it is perforated it no longer conforms to the API 5CT specification because it no longer meets the yield strength requirements. Perforated pup joints are employed to allow fluids to enter the production tubing or, alternatively, to create a mud anchor.

Apergy Canada ULC—Alberta Oil Tool division (AOT)^{Footnote 9}

[30] AOT produces and markets production service equipment solutions for the oil and gas industry. Products are made under the “Norris” brand. Norris was founded in 1882. In addition to pup joints, AOT produces and sells sucker rods, sucker rod guides, polished rods, tubing and casing fittings, butterfly valves and controls.

[31] In June 2020, AOT’s parent company, Apergy Corporation, merged with ChampionX Holding Inc., the former upstream energy business of Ecolab Inc. As a result, Apergy Canada ULC’s ultimate parent company is now ChampionX Corporation. The production and sale of pup joints in Canada has been unaffected by the merger.^{Footnote 10}

[32] In addition to its production in Canada, AOT also imported pup joints from non-Chinese sources in the POR.^{Footnote 11}

[33] AOT reported that its production of pup joints is unchanged since the last expiry review. The company manufacturers two key types of pup joints: seamless J55 grade pup joints and seamless L80 pup joints. J55 pup joints use seamless OCTG tubing as a raw material input. The tube is cut-to-length and the ends are upset through the upset forging process and then the ends are threaded. L80 pup joints use a seamless mechanical tube that has been heat-treated and meets the steel chemistry for L80 OCTG specifications. The body of the pup joint is then profiled or machined down to achieve the required thickness using a mechanical lathe and then the ends are threaded.

[34] AOT performs two types of tests in order to ensure the pup joints meet API specifications. The first is a drift test to ensure there are no bends or kinks within the hollow of the tube. The second is a hydrostatic test to ensure the pup joint can withstand the required internal pressure. Pup joints are then stencilled and painted and if required, they are perforated by punching holes in the body of the tube.^{Footnote 12}

Tenaris Canada

[35] Tenaris Canada did not provide a full ERQ response. As such, limited information is available regarding their production volumes of pup joints in Canada.^{Footnote 13}

[36] At the last pup joints expiry review, Tenaris was described as a global manufacturer of steel pipe products and related services which are supplied primarily to the world’s energy markets. Tenaris began operations in Canada in 1999.

[37] Tenaris Canada produced pup joints in each year of the last POR (i.e. 2013 through 2016) and also imported pup joints into Canada from non-subject countries in each of these years.^{Footnote 14} In the current expiry review, Tenaris reported production of pup joints in Canada in the four-year period starting in 2018 and throughout the duration of the POR.^{Footnote 15}

Canadian production

[39] AOT provided information with respect to their sales of pup joints in the Canadian market as well as an estimate of pup joints sold by other producers in Canada and imports into Canada, through their response to the importer ERQ.^{Footnote 21}

[40] AOT estimated what its own sales accounted for of the Canadian Market. Using their actual sales of pup joints over the POR, they accounted for other Canadian production and imports by estimating what percentage these represented of the Canadian market based on their market intelligence.

[41] AOT’s sales volumes in Canada were based on pieces, rather than weight. As such, their volume estimate of the Canadian market was also done on the basis of pieces. The company converted their piece count using a factor adjustment to arrive at an estimate of their pup joint sales in metric tonnes. This conversion was not done for their estimate of the balance of the Canadian market (i.e. other producers and imports).

[42] The CBSA’s estimate of the Canadian market used actual Customs data to estimate imports of pup joints. Consequently, only AOT’s estimate of sales from Canadian production was used in Tables 1 and 2 above.

[43] To account for the information submitted by Tenaris, their pup joint volumes were deducted from the “other Canadian sales” totals estimated by AOT, such that the total “other Canadian sales” is unchanged from AOT’s estimate, with the exception that the CBSA expressed this in metric tonnes rather than pieces. The “other Canadian sales” estimated by the CBSA simply separates that which is estimated to be from Tenaris and the balance which is attributable to other Canadian producers. This was determined to be the best way to account for all sources of information submitted.

[44] Based on the apparent Canadian market figures in Tables 1 and 2 above, estimated sales values and volumes of pup joints in Canada by Canadian producers declined significantly during the onset of the pandemic in 2020 in comparison to 2019 before rebounding in 2021, although not to pre-pandemic levels.

[45] Overall, the Canadian market tracked similarly to the subject imports from China and the Canadian producers over the POR, with a significant drop in 2020 and a recovery in 2021 to near 2019 levels at just over 800 MT and just under $5.8 million.^{Footnote 22}

Imports

[46] While import volumes from China trended similarly to that of the sales volumes of Canadian producers, China’s rebound in 2021 exceeded the pre-pandemic imports in 2019, with 189 metric tonnes (MT) marking the highest import total of the three-year POR.

[47] Non-named country import volumes increased in 2020 to 139.6 MT up from 45.3 MT in 2019 before settling back to 110.7 MT in 2021. The increase was also evident in the value as non subject imports jumped from $445,084 in 2019 to $2.37 million in 2020 before dropping back to $919,010 in 2021. The spike in 2020 is attributable to Mexico, which jumped from almost no imports in 2019 to 123 MT in 2020 and over $2 million, before dropping back to no imports in 2021.

[48] Chinese imports are summarized via enforcement data provided by the CBSA SIMA Compliance Unit below. In their ERQ response, WestCan, who appear through CBSA import statistics to be the sole importer of subject goods, through their related exporter Weijia (confirmed by AOT)^{Footnote 23} reported importations of J55, L80 and P110 grade pup joints in sizes up to 4-1/2” in outside diameter, in all lengths 2 to 12 feet.^{Footnote 24}

Administrative record

[56] The information considered by the CBSA for purposes of this expiry review investigation is contained in the administrative record. The administrative record includes the information on the CBSA’s exhibit listing, which is comprised of the CITT’s administrative record on which the CITT based its decision to initiate the expiry review, CBSA exhibits and information submitted by interested persons, including information which they feel is relevant to the decision as to whether dumping and subsidizing are likely to continue or resume absent the CITT order. This information may consist of expert analysts’ reports, excerpts from trade magazines and newspapers, orders and findings issued by authorities of Canada or of a country other than Canada, documents from international trade organizations such as the World Trade Organization and responses to the ERQs submitted by Canadian producers, exporters, importers, and governments.

[57] For purposes of an expiry review investigation, the CBSA sets a date after which no new information submitted by interested parties will be placed on the administrative record or considered as part of the CBSA’s investigation. This is referred to as the “closing of the record date” and is set to allow participants time to prepare their case briefs and reply submissions based on the information that is on the administrative record as of the closing of the record date. For this investigation, the administrative record closed on April 19, 2022.

Procedural issues

[58] The CBSA will normally not consider any new information submitted by participants subsequent to the closing of the record date. However, in certain exceptional circumstances, it may be necessary to permit new information to be submitted. The CBSA will consider the following factors in deciding whether to accept new information submitted after the closing of the record date:

1. the nature, relevance, materiality and volume of the information
2. the difficulties encountered by the participant in obtaining or submitting the information by the date specified (for example, the availability of the information or emergence of new or unforeseen issues)
3. whether the information can reasonably be taken into consideration by the CBSA for purposes of the proceedings including whether there is sufficient time to verify the information
4. whether other parties are likely to be prejudiced if the information is used (for example, the opportunity for other participants to respond to the information)
5. whether acceptance of the information would compromise the ability of the CBSA to conduct the proceedings expeditiously and
6. any other factors that are relevant in the circumstances

[59] Participants wishing to file new information after the closing of the record date, either separately or in case briefs or reply submissions, must identify this information so that the CBSA can decide whether it will be included in the record for purposes of the determination.

[60] In the current expiry review investigation, confidential information pertaining to Tenaris Canada’s production volumes of pup joints in Canada was submitted in the late afternoon of the closing of the record date but technically after the noon deadline.^{Footnote 26} The information was considered relevant and material and could easily be taken into consideration without compromising the timelines of the process.

[61] Since the CBSA had solicited this information from Tenaris once it was apparent they were not filing an ERQ response and given that the confidential information was still submitted on the close of the record date, the CBSA accepted the information without incident or objection from the other parties in the expiry review.

[62] Furthermore, two weeks following the close of the record, counsel for AOT requested that the CBSA accept additional information on the record in support of their position that the expiry of the CITT order is likely to result in resumed dumping and subsidizing of Chinese subject goods. In particular, AOT sought to place additional information on the record showing the plummeting demand for oil and gas in China in April 2022 and a directly correlated year over-year increase in Chinese seamless tubing exports to Canada during the same period.^{Footnote 27}

[63] After reviewing the eight public attachments, it was determined that the information was relevant and material to the expiry review, was not available prior to the close of the record and could reasonably be taken into consideration by the CBSA without prejudicing other parties in any way. As such, the CBSA accepted the information as filed.

[64] Counsel for Weijia and WestCan, the only other participants, were granted three days to comment on this late-filed information but no comments were provided.

Parties contending that continued or resumed dumping is likely

[65] AOT made representations in its ERQ response and case brief supporting its position that dumping of pup joints from China is likely to continue or resume should the CITT’s order be rescinded. In other words, the Canadian producer argued that the anti-dumping measures currently in place should remain.

[66] Similarly, both Weijia, an exporter of subject goods, and WestCan, its related importer in Canada, made representations in their respective ERQ responses and in their case brief that dumping of pup joints from China is likely to continue or resume should the order be rescinded.

[67] Given the consensus of opinion amongst the three respondents mentioned above, the parties unsurprisingly provided similar arguments as to why dumping is likely to continue or resume absent the CITT order. The broader-based arguments made by the parties are presented below followed by more specific arguments.

• Production capacity for steel in China
• Production capacity for OCTG in China
• Export dependence of Chinese steelmakers
• Trade measures against China indicate a propensity to dump and
• Likely diversion of pup joints from other markets and the attraction of Canadian market

Production capacity for steel in China

[68] Counsel for Weijia and WestCan submitted that “the current overproduction and overcapacity of steel production in China greatly magnifies the risk of a return of dumped and subsidized Chinese shipments of pup joints to Canada and, without the order in place to discipline prices of Chinese pup joints, there will be significant disruption to the Canadian market for pup joints.”^{Footnote 28}

[69] Counsel for each supporting party cited numerous sources of information on the record to illustrate the magnitude of steel production in China.

[70] For example, counsel for Weijia and WestCan cited the CBSA’s comments in a recent expiry review regarding China’s steel industry:

[71] In absolute terms, China reportedly produced over 1 billion MT of crude steel in 2020, nearly 70 million MT (MMT) more than its steel consumption that year. It is this substantial difference between production and home market demand which counsel stated explains why China is also the largest steel exporter in the world, with reported steel exports of over 51 MMT in 2020.^{Footnote 30}

[72] Notwithstanding apparent efforts to curtail steel production in China, counsel for AOT noted that other producers are set to expand their steelmaking capabilities. For example, in 2020, the Baowu Group announced its plan to increase its steelmaking capacity to 200 MMT by 2025, from the present 111 MMT.^{Footnote 31}

[73] This continued into 2021, where counsel for AOT cited reports that “China approved nine more steel projects under its production capacity swap program and while some of these projects are intended to lead to a net decline in Chinese steel capacity, the decline is not sufficient to offset the projected increase in China’s overall steelmaking capacity for 2021 and 2022.”

[74] The World Steel Association (WSA) was also cited in addressing steel production growth in Q2 2021, where they stated:

[75] In a similar report, China’s annualized steelmaking capacity reportedly rose to 1.264 billion MT in H1-2021, an increase of 9 MMT from 2020. With the additional planned projects, annual steelmaking capacity is expected to reach 1.288 billion MT by the end of 2021, an increase of 24 million MT from 2020.^{Footnote 33}

[76] Counsel for Weijia and WestCan concluded that the evidence on the record demonstrates China’s history of steel production exceeding consumption and as steel supply continues to exceed demand, it is likely to further encourage steel producers in China to pursue export markets as a result.^{Footnote 34}

Production capacity for OCTG in China

[77] The parties collectively submitted that China has a production capacity for OCTG, of which pup joints are a subset, that is many times greater than the estimated size of the Canadian market. They argued this makes China capable of making pup joints sufficient enough to “overwhelm the entire Canadian market for pup joints.”^{Footnote 35}

[78] Counsel for AOT provided a compendium of over forty Chinese OCTG producers including a segment of 13 manufacturers with a total capacity of OCTG/energy tubulars of just over 8 MMT.^{Footnote 36}

[79] Counsel cited a recent CITT expiry review decision which stated “China remains the largest steel pipe and tube producing country worldwide, comprising approximately 28 percent of the global production.”^{Footnote 37} Other information cited from 2020 confirmed China as “the world’s second largest OCTG market, following the U.S., and the largest OCTG exporter to global markets (particularly in API grades).”^{Footnote 38}

[80] With respect to OCTG specifically, in the 2020 OCTG 1 expiry review, the CITT recognized that total OCTG capacity in China was around 7 to 11.7 million tonnes, with total excess capacity at 3.5 to 5.6 million tonnes.^{Footnote 39}

[81] Since pup joints are essentially short lengths of OCTG, counsel for AOT argued that in spite of current measures against China for Seamless Casing and OCTG I, that in absence of the measures on pup joints, there is “nothing stopping a Chinese energy tubular producer that is shut out of the Canadian (and global) market from producing OCTG tubing, cutting it to length, finishing the product, and selling it into Canada as pup joints.”^{Footnote 40}

[82] Counsel for Weijia and WestCan noted that at the time of the CBSA’s last expiry review, 84 Chinese producers had active certifications under the American Petroleum Institute (API) to manufacture pup joints. Currently, evidence cited on the record indicates that there at least 102 producers with an active API 5CT certification in China.^{Footnote 41}

[83] Furthermore, counsel argued that “just fourteen of those 102 producers of pup joints have production capacity of more than 8.1 million MT.”^{Footnote 42} Counsel for AOT stated that this was particularly concerning, given the comparatively smaller size of the estimated Canadian market.

[84] Counsel for Weijia and WestCan stated that just this sampling of producers “clearly demonstrates the ability of the Chinese manufacturers to flood and dominate the Canadian market for pup joints if there were no finding in place.”^{Footnote 43}

Export dependence of Chinese steelmakers

[85] Counsel for AOT, Weijia and WestCan identified the imbalance between China’s production and domestic demand as an ongoing issue which forces their producers to seek out export markets aggressively.

[86] As noted above, information on the record indicates that China remains the largest steel exporter in the world, with steel exports of over 51 MMT in 2020^{Footnote 44} and is the largest OCTG exporter as well.^{Footnote 45}

[87] Information on the record cited by counsel for AOT indicates that numerous large OCTG producers in China, including those with normal values for subject pup joints, also acknowledge their export focus.^{Footnote 46}

[88] For example, “Weijia, the lone exporter respondent in this expiry review, confirms that it exports all of its production, indicating that “{t}he sales recorded as domestic sales were made to export oriented Trading Companies that are 100% focused on the export market.”^{Footnote 47}

[89] Tianjin Pipe Corporation (TPCO),^{Footnote 48} Shandong Molong,^{Footnote 49} Hengyang Valin Steel^{Footnote 50} and Jinagsu Changbao^{Footnote 51} were all cited for statements in their own corporate publications which serve to promote their international business. TPCO and Changbao are noted companies with normal values for pup joints.

[90] Counsel for AOT submitted information on the record which asserted the export dependence of pup joint producers in China may be further exacerbated by recent developments concerning lockdowns in major cities such as Shanghai.^{Footnote 52}

[91] The ripple effect of the lockdowns has hit the manufacturing sectors, including petroleum refineries, where in April 2022 operating rates in China’s four state-owned refiners reportedly fell to 76.4 percent, the lowest levels seen since the onset of the pandemic in April 2020.^{Footnote 53}

[92] Counsel for AOT argued that these “declines in domestic oil and gas demand underscore China’s export imperative. Combined with restricted drilling in Russia, and trade restrictive measures in other major oil and gas producing countries, China has fewer and fewer viable export destinations available to it. These circumstances further demonstrate the likelihood that dumped and subsidized exports will resume should the Order expire.”^{Footnote 54}

Trade measures against China indicate a propensity to dump

[93] All three parties, AOT, Weijia and WestCan, provided examples in their case briefs or in their response to the ERQ of anti-dumping duties being imposed by countries other than Canada with respect to steel and steel-related products from China.^{Footnote 55} The listing of anti-dumping measures in place against these products were cited as proof that exporters from China have demonstrated a propensity to dump in various jurisdictions throughout the world.

[94] Counsel for Weijia and WestCan, for example, identified 13 anti-dumping measures in other countries that involved Chinese OCTG/pup joints.^{Footnote 56}

[95] In addition to providing examples of anti-dumping duties imposed by other countries, all parties also provided examples of anti-dumping measures in place in Canada with respect to steel and steel-related products from China. The numerous measures in Canada against these products were cited as further evidence of the inability of exporters from China to compete in Canada at fairly-traded prices.

[96] Counsel for Weijia and WestCan stated that since the last expiry review on pup joints which concluded in 2016, the CBSA has conducted expiry reviews on 19 Chinese products, 11 of which concerned steel products, including OCTG. In each review, the CBSA determined that the expiration of the measures was likely to result in the continuation of dumping. The CITT in turn, continued the measures in all 19 cases.^{Footnote 57}

[97] Counsel also noted that since many Chinese pup joints producers are also producers of other energy tubular goods, the existing anti-dumping measures in Canada and abroad, across other types of Chinese steel tubular products, including line pipe and OCTG, demonstrate a pattern of dumping of steel tubular products.^{Footnote 58}

[98] Weijia also conceded that “during the original period of review (July 2010 to June 2011), it had no choice but to dump in order to compete with the other Chinese producers and exporters in order to sell to and compete in the Canadian market.”^{Footnote 59}

[99] Furthermore, counsel for AOT stated that information submitted from Weijia “confirms its stated willingness and readiness to engage in a ‘free for all fight for market share’ at any cost.”^{Footnote 60}

[100] With regard to pup joints imported into the Canadian market specifically, counsel for Weijia and WestCan noted that the CBSA enforcement data reports an annual average of 140 MT of subject imports from China between 2019 and 2021, which is far below the level detected prior to the original finding from July 1, 2010 to June 30, 2011 of 368 MT.^{Footnote 61}

[101] Counsel further noted that while the CBSA identified 109 potential exporters and producers of subject pup joints in China during the original investigation, the record of the POR shows that the field of Chinese exporters has since been limited to a single Chinese exporter, Hengshui Weijia (Weijia), with normal values specifically for pup joints.^{Footnote 62}

[102] Counsel concluded that the number of trade measures against China for steel products, including OCTG and other tubular products, along with the absence of Chinese pup joint exports to Canada, demonstrates that Chinese exporters are widely unable to compete without resorting to dumping.

Likely diversion of pup joints from other markets and the attraction of the Canadian market

[103] Counsel for both AOT and Weijia/WestCan argued that should the order be rescinded, pup joints from China may be diverted from the United States to Canada. The diversion is the result of anti-dumping measures currently in place in the United States.

[104] Counsel specified that in the United States, which has a strong demand for OCTG, Chinese pup joints are included in anti dumping measures that encompass a broad range of OCTG. This order was renewed in November 2020 for another five years.^{Footnote 63} Counsel argued that with such measures in place in the United States, in absence of the dumping order in Canada, the Chinese exporters would naturally divert their attention from the United States and focus on the Canadian market at dumped prices.^{Footnote 64}

[105] Counsel for AOT supported the diversion effect argument by citing the 99.14 percent dumping margin on Chinese OCTG imposed by the United States.^{Footnote 65} Furthermore, counsel stated that:

[106] Counsel for each party arguing for the continuation of the CITT order also noted that the likelihood of diversion is not only an issue with the United States but also potentially with Russia, as the conflict in Ukraine has decreased the demand for Russian oil.^{Footnote 67} It was argued that this could therefore limit the demand for OCTG in Russia, due to less drilling activity.

[107] In Canada, however, counsel argued that the with the demand for oil projected to be strong, the Canadian market will be potentially attractive for OCTG, including pup joints.^{Footnote 68} The price of Brent crude oil, a benchmark for global oil pricing, reached $US100/barrel in February 2022 “for the first time since September 2014.”^{Footnote 69}

[108] Counsel for AOT noted that “Canada’s drilling activity has begun to recover strongly,” and the conflict in Ukraine has “enhanced global demand for Canadian oil.” AOT alleged that this opportunity for the Canadian pup joint industry will be “squandered in its entirety” if the order is not continued.^{Footnote 70}

[109] Counsel cited the dramatic increase in the price of oil as evidence that demand is strong and thus projections for increased drilling activity in Canada are also robust.

[110] Citing the Canadian Association of Energy Contractors (CAOEC), counsel further noted that active rigs in 2021 “marked a return to pre-pandemic levels,” and that “4,650 wells were drilled in 2021, approaching the 4,985 wells drilled in Canada in 2019.” The number of wells drilled in 2022 is projected to be “substantially higher than even the pre-pandemic well count.”^{Footnote 71}

[111] Similarly, counsel for Weijia and WestCan cited the Petroleum Services Association of Canada (PSAC) which forecasted an increase in 2022 of around 16% over the number of wells drilled in 2021, which counsel argued “should translate in a similar increase in the demand for pup joints in Canada.”^{Footnote 72} Counsel also noted that the expected increase in demand in pup joints in 2022 is still expected to be lower than in 2018.^{Footnote 73}

[112] Counsel for AOT summarized the current state of the Canadian market and the demand for the oil produced in Canada in general as follows:

[113] Citing information on the record from Global Affairs Canada (GAC), counsel for AOT noted that the signs of increased Chinese exports diverted to Canada are already apparent in 2022 as “OCTG imports generally, and seamless tubing imports specifically (i.e. the main input in production of pup joints) have increased sharply in the first four months of 2022 as compared to the same period in 2021…imports of Chinese seamless tubing have increased 23 times over, from just 389 MT to 9,137 MT.”^{Footnote 75}

[114] Counsel concluded that “the speed and magnitude of the increase in Chinese OCTG imports into Canada demonstrates the willingness and ability of Chinese exporters to take advantage of any market access opportunity” that without the continuation of the order, resumed dumping to Canada is highly likely.^{Footnote 76}

Likelihood of continued or resumed dumping

[115] In making a determination under paragraph 76.03(7)(a) of SIMA whether the rescission of the order is likely to result in the continuation or resumption of dumping of the goods, the CBSA may consider factors identified in subsection 37.2(1) of the SIMR, as well as any other factors relevant in the circumstances.

[116] Guided by the factors in the aforementioned SIMR and based on the documentation submitted by the various participants and consideration of the information on the administrative record, the ensuing list represents a summary of the analysis conducted in this review:

• Global issues, China’s Domestic Market and the Attraction of the Canadian Market
• China’s Excess Production Capacity and Resulting Export Dependence and
• Chinese Exporters’ Inability to Compete at Non-dumped prices

[117] As mentioned earlier in this summary, three parties provided responses to the CBSA’s ERQ: Canadian producer AOT; and related importer and exporter WestCan and Weijia. In addition to ERQ responses, AOT, WestCan and Weijia submitted case briefs. All three parties made representations that dumping of pup joints from China is likely to continue or resume should the CITT rescind its order.

Global issues, China’s domestic market and the attraction of the Canadian market

[118] In January 2022, the International Monetary Fund (IMF) world economic outlook (WEO) for 2022 forecasted that:

[119] The IMF WEO for 2022 estimated that China’s economy grew 2.3% and 8.1% in 2020 and 2021 respectively, while projecting growth of 4.8% and 5.2% in 2022 and 2023 respectively.^{Footnote 78}

[120] In April 2022, following the initial fallout of the conflict in Ukraine and sanctions against Russian oil, the IMF revised their projections in their WEO for 2022 stating that:

[121] For China, the IMF downgraded its January 2022 growth projection to 4.4% and 5.1% for 2022 and 2023 respectively.^{Footnote 80}

[122] Information on the record indicates that as of the latter part of 2021, China was planning significant investments in its oil and gas exploration. Chinese oil companies, China National Petroleum Company (CNPC), China National Offshore Oil Corporation (CNOOC) and Sinopec are expected to spend about $123 billion USD on drilling and well services in the next five years, an increase from the $96 billion spent between 2016 and 2020.^{Footnote 81}

[123] The most recent information on the record, however, indicates that the oil market in China is in decline, attributable in part to decreases in demand from pandemic lockdowns. Projected declines for April 2022 represent a 1.2 million barrel per day drop from a year earlier.^{Footnote 82} This could lead to a decline in drilling and a subsequent decrease in the demand for OCTG in China, including pup joints.

[124] The IMF outlook for Canada was more moderate in January 2022 than the forecasts for global growth, with an estimated growth of 4.7% in 2021 and projections of 4.1% and 2.8% in 2022 and 2023, respectively.^{Footnote 83} The revised IMF growth projection in April 2022 for Canada was 3.9% in 2022, while 2023 remained unchanged at 2.8%.^{Footnote 84} While more moderate, the forecasted growth is still positive for the Canadian economy, unlike the contraction seen in 2020.

[125] The market for pup joints in Canada will inevitably be impacted by the price of oil, as a higher price of oil will lead to more drilling, which will lead to a greater demand for drilling supplies, including OCTG and thus, pup joints.

[126] Canada’s recent boon in oil and gas was preceded by a series of market shocks. The first was in Q4-2018 with the collapse in the price of oil benchmark Western Canadian Select (WCS),^{Footnote 85} which accounted for an estimated half of Canada’s crude production at that time.^{Footnote 86} A mandatory production cut of 8.7 percent in January 2019 imposed by the government of Alberta remained in place through 2019 to 2021, helping the price of Canadian oil to partially recover although it remained below US$40 per barrel throughout the remainder of 2019.^{Footnote 87}

[127] The oil and gas market subsequently plummeted in early 2020 as the pandemic and an oil price war between Russia and Saudi Arabia caused oil prices across the world to decline dramatically. The effects of this price collapse included Canadian oil and gas companies, many of whom mothballed their operations and halted new drilling.^{Footnote 88} The decline was reflected in Canada’s active drill count, which dropped from an average of 133 active rigs in 2019 to a low of 17 active rigs in the week of June 19, 2020.

[128] Global oil prices began to recover beginning in the late spring of 2020. The price of WCS rebounded throughout the year, and the improvement in oil prices led to the resumption of drilling, increasing demand for OCTG and pup joints in the second half of 2020. By the end of 2020, drilling activity in Canada had also recovered considerably, though it remained well below the pre-pandemic weekly peak of 257 rigs in February 2020.^{Footnote 89}

[129] The recovery in oil and gas drilling activity that began in late 2020 continued throughout 2021. The spot price for WCS rose over 63 percent in 2021, from an average price of $40.04 USD/barrel in January 2021 to $65.60 USD/barrel in January 2022.^{Footnote 90} After a decrease in Q2-2021, drilling activity has steadily improved over the subsequent three quarters. The average number of active rigs in 2021 marked a return to pre-pandemic levels.^{Footnote 91}

[130] The conflict in Ukraine in early 2022 caused substantial shocks in global oil and gas prices. For example, the spot price for WCS initially jumped from an average price of $79.10 USD/barrel in February 2022^{Footnote 92} to $109.60 USD/barrel on March 8, 2022, before dropping to $86.18 USD/barrel on March 31, 2022.^{Footnote 93} Meanwhile, the international Brent crude benchmark^{Footnote 94} traded at $97.92 USD/barrel on April 11, 2022 and was as a high as $129.02 USD/barrel on March 7, 2022.^{Footnote 95} Projections on the record indicate it could go as high as US$185-200 per barrel this year.^{Footnote 96}

[131] Information on the record indicates that Russian petroleum product exports represented eight percent of global exports and ten percent of global petroleum production; as such, present and future sanctions against Russia over the conflict in Ukraine may also continue to create pressure on world oil prices.^{Footnote 97}

[132] On the other hand, China’s lockdown measures in April 2022 aimed to curb the spread of COVID-19 had an immediate effect on benchmark oil prices as fears of economic disruption and decreased consumption in China—a large user of oil—led to West Texas Intermediate (WTI)^{Footnote 98} oil futures sliding as much as 6.7%, falling below US$100/barrel in late April 2022.^{Footnote 99}

[133] As such, global events are still rather volatile and the ultimate impact on the Canadian market for oil and gas remains in flux as does the trickle down impact on the demand for OCTG, including pup joints.^{Footnote 100}

[134] Given the nature of pup joints as essentially short lengths of OCTG, the market trends seen in pup joints track closely with the trends seen in standard length OCTG.

[135] Unlike standard length OCTG, there is no extensive industry reporting on the pup joints segment of this industry sector. As AOT noted:

[136] OCTG base grades, such as J55 are commodity type products, which run in similar pricing trends worldwide and as such the Canadian market will track closely with world trends, particularly with respect to the US market.

[137] Information on the record reported that the global price of J55 OCTG has reached “record high prices since October 2021.”^{Footnote 102}

[138] In terms of the impact on pup joints during the POR, the information on the record indicates that the Canadian market experienced its own series of shocks, similar to those of the oil and gas industry at large.

[139] Imports of pup joints also followed this trend as noted previously in Table 2 of this document where imports rebounded from roughly 209 MT in 2020 to just under 300 MT in 2021.

[140] The net effect of the global shocks from the increase in the price of oil and the impact of Russian sanctions are projected to result in a heightened demand for drilling in Canada and thus pup joints by Q3 2022,^{Footnote 103} resulting in the Canadian market continuing to be an attractive destination for exports of subject goods.

China’s excess production capacity and resulting export dependence

[141] The large production capabilities of pup joint producers in China coupled with a flattening domestic market for these goods in China necessitates an export imperative for Chinese pup joint producers.

[142] There is significant historical context to China’s dependence on steel exports, including OCTG and their pup joints subset.

[143] In the OCTG 1 expiry review decision, the CBSA stated that “Chinese seamless OCTG producers are heavily dependent on export markets” and that information on the record demonstrated that “China’s exports have consistently increased whereas Chinese imports have declined. Pipe and tube products accounted for 12% (i.e. 3.9 million MT) of China’s steel exports.”^{Footnote 104} More specific to the goods at issue, in the year preceding the OCTG 1 expiry review, Chinese exports of OCTG were “more than 1.3 million MT.”^{Footnote 105}

[144] Information on the administrative record also indicates that Chinese producers exported substantial volumes of seamless OCTG in 2021, of which pup joints would form a segment.^{Footnote 106}

[145] Furthermore, in its OCTG 1 expiry review decision, the CITT stated that “Chinese OCTG producers are strongly focused on exports.^{Footnote 107} The CITT also stated that “there is no doubt that Chinese exporters have a continued interest in the Canadian market. The existence of well-established distribution channels in Canada is also likely to facilitate the entry of subject goods in increased volumes, should the order be rescinded.”^{Footnote 108}

[146] Beyond the historical context which suggests China’s OCTG industry is dependent upon exports, there are sales and production evidence from the administrative record which supports the position that this trend continues.

[147] Using the lone responding Chinese exporter in this proceeding as an example, Weijia noted that its sales within China “were made to export oriented Trading Companies that are 100% focused on the export market.”^{Footnote 109} As such, it is likely that the majority of Weijia’s sales were ultimately destined for export markets.

[148] Looking at the direct exports reported by the company, Weijia demonstrated a heavy dependence on foreign markets during the POR.^{Footnote 110}

[149] By comparison, the CBSA’s estimate of the Canadian pup joints market in 2021 from Table 2 in this document is about 800 MT. Consequently, even with the current anti-dumping measures in place, confidential information on the record indicates that Weijia accounted for a significant part of the Canadian market in 2021 and has substantial capacity.^{Footnote 111}

[150] By Weijia’s own admission, they have the ability to expand this capacity and would consider doing so, if the order were rescinded:

[151] The concession by Weijia is striking in how the company anticipates Chinese exporters would quickly pounce on the opportunity to undercut the current pricing in Canada but also how Weijia would potentially respond if left unrestrained by the anti-dumping measures in Canada, in order to compete with the anticipated price undercutting.

[152] In addition to Weijia, the capacity of over forty OCTG/pup joints producers was documented earlier in this document.^{Footnote 113} The production capacity of those producers vastly exceeds the size of the Canadian market estimated by the CBSA^{Footnote 114} and the excess capacity at Chinese producers’ disposal to produce beyond what is currently produced is well documented in this summary.

[153] Excess capacity can create pressure to produce more for purposes of export. In this respect, in its OCTG 1 expiry review decision, the CITT stated that:

[154] There is no indication on the administrative record for this proceeding that this export dependency has changed.

Chinese exporters’ inability to compete at non-dumped prices

[155] There are currently numerous anti-dumping measures in place by countries other than Canada aimed at protecting their domestic industries from the injurious effects of dumped tubular steel products from China.

[156] Information on the record indicates that there are at least ten anti-dumping measures against Chinese OCTG in countries other than Canada, including the United States and Mexico.^{Footnote 116}

[157] In Canada, there are currently 16 different steel products from China that are subject to anti-dumping measures, in addition to pup joints. At the last pup joints expiry review, there were 11 such measures.^{Footnote 117}

[158] Of note are many tubular products such as carbon steel welded pipe and piling pipe and, more closely related to pup joints, line pipe, OCTG and seamless casing. These latter three products, like pup joints, are all goods specifically designed for the oil and gas industry. Sucker rods, although not a tubular product, are used in conjunction with OCTG in the extraction of oil and anti dumping (and countervailing) measures against Chinese sucker rods have come into effect since the last expiry review.

[159] Exporters in China have limited access to other markets by virtue of the numerous anti-dumping and related trade measures against their steel tubing in those markets and that limited access is largely related to the dumping of OCTG. The existence of a substantial number of anti-dumping measures in place in various countries against tubular products from China and, more importantly, the existence of the same measures against OCTG products in Canada and the United States would indicate that exporters in China continue to aggressively sell these goods in export markets at dumped prices.

[160] The United States is the world’s largest producer of oil^{Footnote 118} but Chinese producers have limited access to this market due to significant trade barriers, including tariffs made pursuant to Section 232 of the Trade Expansion Act of 1962 and Section 301 of the U.S. Trade Act of 1974, as well as antidumping and countervailing duties.^{Footnote 119} The limited access to a large market for pup joints like the United States, means the absence of anti-dumping measures in Canada could lead to pup joints being diverted to the Canadian market, where drilling activity is strengthening and projected to increase further in 2022.

[161] Weijia’s concession that absent the order, they would have no choice but to dump is also a significant declaration in this proceeding:

[162] Weijia’s projection of how it would behave in absence of the order speaks to the ripple effect of an unregulated market, whereby even a party like Weijia which has been able to compete without dumping, would likely experience price pressure from the abundant number of other parties that have not been able to compete with the measures in place and force Weijia into dumping in order to continue making sales to Canada.

[163] In the CBSA’s original dumping investigation of pup joints from China, which was initiated in 2011, Weijia was the only exporter to participate. Weijia was one of four cooperative exporters to receive normal values in the 2015 re-investigation.

[164] The following represents the Chinese exporters that have been provided with normal values (and amounts of subsidy):

• Hengshui Weijia Petroleum Equipment Manufacturing Co., Ltd. (Weijia)
• Tianjin Pipe (Group) Corporation (TPCO)
• Tianjin Tiangang Special Petroleum Pipe Manufacture Co., Ltd. (TTSP) and
• Jiangsu Changbao Group (Changbao)^{Footnote 121}

[165] It is noteworthy that Weijia has been able to sell to WestCan, its related importer in Canada, during the POR. Analysis of import data suggests that Weijia is the only exporter of subject goods with active normal values. There is no evidence that other exporters have availed themselves of their normal values.

[166] In addition to Weijia, who is clearly export oriented towards the Canadian market, TPCO,^{Footnote 122} TTSP,^{Footnote 123} and Jinagsu Changbao^{Footnote 124} all have corporate literature cited on the record that points to their focus on export markets. Consequently, the lack of sales to Canada would appear to be an inability to sell without dumping, rather than a lack of interest in export markets.

[167] This was corroborated by WestCan’s market intelligence where they stated on the record that “WestCan is very active in the Canadian market where it resells the Hengshui Weijia pup joints and has not seen any evidence of other Chinese pup joints.”^{Footnote 125}

[168] The limited number of parties that have received and availed themselves of normal values by making sales of subject goods to Canada is evidence that nearly all exporters continue to be unable to sell subject goods to Canada at non-dumped prices.

Determination regarding likelihood of continued or resumed dumping

[169] Based on the information on the record demonstrating global issues creating a spike in the price of oil, insufficient demand in China, the attraction of the Canadian market, China’s excess production capacity and the resulting export dependence; and the inability of exporters, with the exception of one, to sell pup joints to Canada at non-dumped prices, the CBSA determined that the rescission of the order is likely to result in the continuation or resumption of dumping into Canada of certain pup joints originating in or exported from China.

Parties contending that continued or resumed subsidizing is likely

[170] AOT, Weijia and WestCan, all contend that the subsidizing of pup joints from China is likely to continue or resume should the CITT’s order expire.

[171] Many of the arguments made in favour of the likelihood of continued dumping overlap with the arguments made in the same regard with respect to subsidy. However, there are certain distinct elements to the subsidy arguments which are documented in this section.

[172] Given the consensus of opinion amongst the three respondents mentioned above, the parties unsurprisingly provided similar arguments as to why subsidizing is likely to continue or resume absent the CITT order.

[173] The broader-based arguments made by the parties are presented below followed by more specific arguments:

• Continued existence of subsidy programs in China and
• Trade measures against China indicate a propensity to subsidize

Continued existence of subsidy programs in China

[174] The participating parties all cited information on the record that demonstrates the continued existence of subsidy programs in China for tubular producers. Recent countervailing determinations by the CBSA were specifically cited to support this assertion.

[175] For example, counsel for AOT summarized recent CBSA countervailing investigations as follows:

[176] Counsel for Weijia and WestCan also cited the high number of subsidy programs the CBSA has previously investigated, noted that the last subsidy re-investigation on OCTG in 2015 had “identified 113 potentially actionable subsidy programs” and in the ensuing expiry review concluded that there was a likelihood of continued or resumed subsidizing.^{Footnote 127}

[177] The continued existence of subsidy programs available to OCTG and pup joint producers was further supported by company-specific information on the record. For example, counsel for AOT cited Shandong Molong Petroleum’s 2020 annual report where the company itemized government grants in 2018 through 2021, totalling over 62 million RMB.^{Footnote 128}

Trade measures against China indicate a propensity to subsidize

[178] Counsel cited the CBSA’s current drill pipe countervailing investigation as the most recent example of an OCTG product investigated for subsidizing in China. Counsel identified the 364 potentially available subsidy programs in China the CBSA is investigating. Counsel summarized that “it is reasonable to conclude that there is a long list of subsidy programs available to Chinese pup joint producers and exporters.”^{Footnote 129}

[179] In Canada, counsel for Weijia and WestCan identified 21 subsidy measures against China, including 15 concerning the steel sector, demonstrating the degree of subsidization across the industry by the GOC.^{Footnote 130}

[180] Counsel for AOT also noted that in addition to countervailing measures concerning Chinese OCTG, the United States also has four other countervailing measures against other Chinese steel tubular products.^{Footnote 131}

Likelihood of continued or resumed subsidizing

[181] In making a determination under paragraph 76.03(7)(a) of SIMA whether the expiry of the order in respect of goods from China is likely to result in the continuation or resumption of subsidizing of these goods, the CBSA may consider factors identified in subsection 37.2(1) of the SIMR, as well as any other factors relevant in the circumstances.

[182] Guided by the factors in the aforementioned subsection 37.2(1) of the SIMR and having considered the information on the administrative record, the following list represents a summary of the CBSA’s analysis conducted in this expiry review investigation with respect to subsidizing:

• The continued availability of subsidy programs in China
• The GOC’s provision of subsidies to OCTG producers in China and
• Countervailing measures against closely-related Chinese tubular products

The continued availability of subsidy programs in China

[183] Weijia was the only exporter to participate in the CBSA’s original subsidy investigation, which concluded March 3, 2012. At that time, the CBSA determined that the GOC had conferred benefits to Weijia under the following two programs:

1. Preferential Tax Policies for Enterprises with Foreign Investment
2. Grants for Export Activities^{Footnote 132}

[184] The total amount of subsidy for these two programs was calculated to be 563.9 Renminbi per metric tonne (RMB/MT). Detailed descriptions of these programs and explanations as to why they were regarded as subsidies subject to countervailing duties are contained in the Statement of Reasons issued at the final determination.^{Footnote 133}

[185] For all other exporters, the amount of subsidy was determined under a ministerial specification pursuant to subsection 30.4(2) of SIMA. The amount of subsidy calculated for these exporters was 9,125.6 RMB/MT.^{Footnote 134}

[186] On December 14, 2015, the CBSA concluded a re-investigation to update the amount of subsidy for pup joints from China. Again, Weijia was the only pup joint specific exporter (i.e. does not export other OCTG) to participate and this time the amount of subsidy calculated for the company was 0.04 RMB/piece. The amount of subsidy for all other exporters remained at 9,125.6 RMB/MT.^{Footnote 135}

[187] The following other Chinese exporters of OCTG have also been provided amounts of subsidy for their pup joints:

• Tianjin Pipe (Group) Corporation (TPCO)
• Tianjin Tiangang Special Petroleum Pipe Manufacture Co., Ltd. (TTSP) and
• Jiangsu Changbao Group (Changbao)^{Footnote 136}

[188] As previously noted, the only exporter believed to make sales of pup joints to Canada during the POR, is Weijia, through their related importer, WestCan.^{Footnote 137}

[189] The amounts of subsidy, as it pertains to each of these and all other exporters, continue to be in effect at the time of this statement of reasons.^{Footnote 138}

[190] In both the CBSA’s original investigation, which concluded in 2012 and its re investigation in 2015, the GOC did not submit sufficient information to enable the CBSA to determine the amount of subsidy in accordance with subsection 30.4(1) of SIMA.^{Footnote 139} As such, amounts of subsidy, even for co-operating exporters, were determined under a ministerial specification.

[191] Similarly, in the last expiry review investigation concerning certain pup joints, which concluded November 30, 2016 as with the present expiry review, the GOC did not furnish a response to the ERQ. The absence of participation from the GOC has limited the CBSA’s ability to have a more fulsome understanding of the scope of GOC subsidization than if they had participated.

[192] In response to this expiry review, Weijia, the lone participating exporter of pup joints conceded that although they did not access government subsidies subsequent to the original investigation, demonstrating its “intent to export to Canada at fairly-traded prices;” in the absence of the CITT’s order, they would “have no option but to lower its selling prices to Canada to compete with the subsidized prices of the other Chinese exporters of pup joints. In order to do so, it will have to pursue government subsidies and sell at prices significantly lower than their current prices.

[193] Notwithstanding the lack of participation from the GOC, the fact that Weijia received subsidies from the GOC in the past, concedes they would pursue them if necessary in the future and the recent evidence of continued subsidy programs in China noted above, supports the likelihood that pup joints from China will continue to be subsidized should the CITT’s order be rescinded.

The GOC’s provision of subsidies to OCTG producers in China

[194] Beyond conferring benefits to producers of pup joints and the apparent continued availability of subsidy programs, the GOC has been found to have conferred benefits to producers of the broader range of OCTG.

[195] As previously noted, the last subsidy re-investigation concerning pup joints was conducted in 2015. That process covered three Chinese OCTG countervailing measures: Seamless Casing, OCTG 1 and Pup Joints. At the conclusion of that re-investigation, the CBSA determined amounts of subsidy for eleven different exporters. The amounts of subsidy exported by these companies ranged from 2.20 RMB/MT to 1,066.56 RMB/MT.^{Footnote 140}

[196] The American Petroleum Institute (API) identifies 102 total producers in China with a certification to produce pup joints. It also should be noted that eight of the eleven exporters from the 2015 re-investigation also have the capability of producing pup joints as per their API certification.^{Footnote 141} This information would indicate that the GOC does not limit subsidy programs to only pup joint producers but offers subsidy programs to the much wider category of OCTG producers in China’s steel sector, which have the capability to manufacture pup joints.

[197] At the initiation of the 2015 subsidy re-investigation, the CBSA named 67 potentially actionable subsidy programs available to exporters and producers in China. By the conclusion of the re-investigation an additional 46 programs were identified through the CBSA’s examination and verification of information submitted by the participating exporters.^{Footnote 142}

[198] Through the GOC’s own disclosure, continued existence of Chinese subsidy programs is not in question. China’s notification to the WTO’s Committee on Subsidies and Countervailing Measures in 2021 identified 71 central government subsidy programs and another 36 at the sub central level (i.e. municipal, provincial or autonomous region). Several of these programs target the steel industry and the majority are preferential tax programs.^{Footnote 143}

[199] Notwithstanding this disclosure, the transparency of China’s subsidy programs has been the subject of scrutiny at the World Trade Organization (WTO) ever since China’s accession in 2001. As such, numerous member countries raised concerns with China’s most recent notification of subsidies to the WTO noted above.

[200] The general concern involves the timeliness and completeness of the GOC’s notification to the WTO of its subsidy programs. Amongst the issues raised:

[201] In a similar critique of China’s adherence to subsidy notification obligations:

[202] Australia recently called on China to disclose the actual amount of money allocated to certain preferential tax programs.^{Footnote 146} Similarly, the United Kingdom also questioned China on both the eligibility criteria and scope for certain preferential tax programs as well as further details on preferential loans issued by state-owned banks, which have been found to exist in the past but were alleged to be absent from China’s most recent notification.^{Footnote 147}

[203] Citing statements from China’s National Development and Reform Commission (NDRC), the United States also requested China to disclose more details of the country’s use of certain “guidance funds,” which the United States characterized as funds used to make “equity investments in various sectors.” They further stated that:

[204] As a result, the GOC was asked why there was no disclosure in respect of the following government guidance funds: (1) National IC Fund; (2) Shanghai IC Fund; (3) Hubei IC Fund; (4) National IC Fund, Phase 2; and (5) Beijing IC Industrial Development Fund.^{Footnote 149}

[205] The United States also raised numerous other concerns of apparent subsidizing that was not disclosed by the GOC, including one involving steel producer, Lingyuan Iron & Steel Co. Ltd., a state-owned steel company. The United States alleged that this company had received a reported 790 million RMB from a Chinese municipal government in 2015 and other subsidies going back to 2012 but these have not been reported in this notification to the WTO.^{Footnote 150}

[206] As such, notwithstanding the extensive disclosure of its subsidy programs to the WTO, there appear to be numerous other subsidy programs which have been unreported, making it likely that additional subsidy programs exist, which may be benefiting OCTG producers in China, including those that produce pup joints that the CBSA has never investigated.

[207] The information on the record demonstrates a long-standing history of subsidies offered to producers in China, including those involved in OCTG, with drill pipe being the most recently initiated investigation. As supported by the recent WTO submissions, there is nothing contained on the administrative record for this proceeding that indicates the availability or provision of these subsidies has changed.

Countervailing measures against closely related Chinese tubular products

[208] Currently in Canada, there are six different tubular steel products from China that are subject to countervailing duty. They are as follows: carbon and alloy steel line pipe, carbon steel welded pipe, large line pipe, oil country tubular goods, piling pipe, and seamless casing.^{Footnote 151} Three of these goods: line pipe (2 findings), OCTG, and seamless casing, are specifically used in the oil and gas industry. In addition to these goods, there are eight other steel-related products from China that are subject to countervailing duty in Canada, including sucker rods, which are also used in conjunction with OCTG in the drilling and extraction of oil and gas.^{Footnote 152}

[209] The existence of 14 countervailing measures in place in Canada against steel products from China would indicate that the GOC has placed a great deal of importance on its steel industry and has subsidized it accordingly.

[210] In 2020, as a result of its five-year Sunset Review on OCTG from China, the United States continued its countervailing measures, owing largely to the following reasons:

• in the original investigation and two subsequent administrative reviews, the Department of Commerce (DOC) found that Chinese producers benefited from subsidy programs prohibited under the ASCM
• more recent countervailing investigations have concerned other steel products, including steel pipe and
• the DOC concluded that Chinese producers and exporters of OCTG also are likely benefiting from new subsidies in addition to those already countervailed^{Footnote 153}

[211] Amongst the findings in the administrative reviews noted above, the DOC added six additional countervailable subsidy programs to those found at the original investigation.^{Footnote 154}

[212] The United States has at least 19 countervailing measures against steel products from China, including tubular steel products.^{Footnote 155} Of particular note are the countervailing measures against OCTG from China. The DOC’s product definition of oil country tubular goods encompasses pup joints. In 2020, the U.S. International Trade Commission extended countervailing duty orders on OCTG from China for a further five years.^{Footnote 156}

[213] The current measures in Canada and the United States on OCTG and other closely related tubular products further indicates that producers of OCTG and pup joints in China continue to receive countervailable benefits from the GOC.

Determination regarding likelihood of continued or resumed subsidizing

[214] Based on the information on the record in respect of: the continued and historical availability of subsidy programs for pup joint producers in China; the GOC’s continued provision of subsidies to its producers, including those engaged in OCTG; and the countervailing measures against the same or similar tubular steel products in Canada and the United States, the CBSA determined that the rescission of the order is likely to result in the continuation or resumption of subsidizing of pup joints originating in or exported from China.